The scalability of a marketplace depends on the operations of the marketplace platform as well as its sellers' cost structures and capacities. When fixed costs of entry are high, sellers with small capacities may be deterred from entering the market because of their inability to leverage...

The field of strategy has mounted an enormous effort to understand, define, predict, and measure how organizational capabilities shape competitive advantage. While the notion that capabilities influence strategy dates back to the work of Andrews (1971), attempts to formalize a “capabilities...